EUROPEAN COMMISSION
DG Competition
Case M.7822 - DENTSPLY / SIRONA
Only the English text is available and authentic.
REGULATION (EC) No 139/2004
MERGER PROCEDURE
Article 6(1)(b) in conjunction with Art 6(2)
Date: 25/02/2016
In electronic form on the EUR-Lex website under
document number 32016M7822
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected]
EUROPEAN COMMISSION
Brussels, 25.02.2016
C(2016) 1311 final
To the notifying party:
Dear Madam(s) and/or Sir(s),
Subject: Case M.7822 – Dentsply/Sirona
Commission decision pursuant to Article 6(1)(b) in conjunction with
Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
Agreement on the European Economic Area2
(1) On 7 January 2016, the European Commission received a notification of a
proposed concentration pursuant to Article 4 of Council Regulation (EC) No
139/2004 by which Dentsply International Inc. (“Dentsply” or "the Notifying
Party") acquires within the meaning of Article 3(1)(b) of the Merger
Regulation control of the whole of Sirona Dental Systems, Inc. (“Sirona”),
both of the U.S., by way of purchase of shares (the "Transaction").3 Dentsply
and Sirona are collectively referred to as "the Parties".
1 OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on
the Functioning of the European Union ('TFEU') has introduced certain changes, such as the
replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of
the TFEU will be used throughout this decision.
2 OJ L 1, 3.1.1994, p.3 ("the EEA Agreement").
3 Publication in the Official Journal of the European Union No C 012, 15.01.2016, p. 6.
PUBLIC VERSION
MERGER PROCEDURE
In the published version of this decision, some
information has been omitted pursuant to Article
17(2) of Council Regulation (EC) No 139/2004
concerning non-disclosure of business secrets and
other confidential information. The omissions are
shown thus […]. Where possible the information
omitted has been replaced by ranges of figures or a
general description.
2
I. THE PARTIES
(2) Dentsply is a designer, developer, manufacturer and marketer of a broad
range of consumable dental products for the professional dental market.
Dentsply also manufactures and markets other consumable medical devices.
(3) Sirona is a global manufacturer of dental equipment and is focused on
developing, manufacturing, and marketing innovative solutions for dentists.
II. THE OPERATION AND THE CONCENTRATION
(4) Dentsply is taking over the entirety of Sirona. Pursuant to the Agreement and
Plan of Merger dated 15 September 2015, Dawkins Merger Sub Inc., a
wholly-owned subsidiary of Dentsply, will be merged with and into Sirona,
with Sirona as the surviving entity becoming a wholly-owned subsidiary of
Dentsply. Upon completion, Dentsply will be renamed Dentsply Sirona Inc.
("Combined Entity").
(5) Therefore, the Transaction is an acquisition of sole control of Sirona by
Dentsply and constitutes a concentration within the meaning of Article
3(1)(b) of the Merger Regulation.
III. EU DIMENSION
(6) The undertakings concerned have a combined aggregate world-wide turnover
of more than EUR 2 500 million4 (Dentsply: EUR 2 199 million, Sirona:
EUR 881 million). In each of at least three EU Member States, Dentsply’s
and Sirona’s combined aggregate turnover is more than EUR 100 million,
[…]; the aggregate turnover of each of Dentsply and Sirona is more than
EUR 25 million in each of […]; and the aggregate EU-wide turnover of each
of Dentsply and Sirona is more than EUR 100 million (Dentsply: EUR […]
million, Sirona: EUR […] million); and neither Dentsply nor Sirona achieve
more than two-thirds of their aggregate EU-wide turnover within one and the
same EU Member State. The notified operation therefore has an EU
dimension within the meaning of Article 1(3) of the EU Merger Regulation.
IV. MARKET DEFINITION
IV.1. Introduction
(7) The Transaction will combine Dentsply’s dental consumables/materials
business with Sirona’s dental equipment business.
(8) The Parties' activities overlap in (a) CAD/CAM ("computer-aided design and
computer-aided manufacturing") materials, and more specifically in the
segments for the supply of zirconia CAD/CAM blocks and discs and glass
ceramic CAD/CAM blocks, (b) small dental equipment, including endodontic
motors, contra-angle handpieces, ultrasonic scalers and ultrasonic scaler tips,
(c) dental imaging systems, and more specifically intraoral sensor holders
and (d) dental implant systems, including abutments, implant planning
4 Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission
Consolidated Jurisdictional Notice (OJ C95, 16.04.2008, p1).
3
software and implant guides. Of the segments mentioned above, affected are
the ones concerning zirconia CAD/CAM blocks and discs in Germany, and
endodontic motors and contra-angle handpieces at the EEA level and in
several Member States.
(9) The Parties are also active in neighbouring segments, of which affected are:
(a) dental CAD/CAM systems and CAD/CAM materials, (b) treatment
centres and small dental equipment, such as endodontic motors and contra-
angle handpieces and (c) endodontic motors and contra-angle handpieces5.
IV.2. CAD/CAM systems
IV.2.1. Product market definition
IV.2.1.1. Introduction
(10) CAD/CAM is a dental restoration technology. Other dental restoration
technologies include casting, pressing and 3D printing.
(11) The CAD/CAM technology can be used by dental laboratories ("labside
CAD/CAM systems") to manufacture restorative materials (e.g. crowns,
bridges, and inlays) for multiple dentists based on the specifications for
individual patients. The CAD/CAM technology can also be used by the
dentists themselves in their office ("chairside CAD/CAM systems").
(12) Chairside CAD/CAM systems comprise, in a complete chairside system, a
digital impression system (scanner), 3D dental design software, and a
chairside mill. The workflow is as follows: a digital impression system scans
the damaged area, captures the image of the tooth or teeth requiring
restoration and proposes the specifications for the restoration. The milling
unit then mills the dental restoration to the required specifications based upon
the captured image and the dentist’s design specifications. According to the
Parties’ estimates, the penetration of CAD/CAM systems in Europe amounts to
approximately 5-10% of dental practices (approximately 3% in France, 7% in
the UK, 2% in Italy, 8% in the Netherlands and peaking in Germany -
approximately 15% in 2014).
IV.2.1.2. The Notifying Party's view
(13) The Notifying Party submits that there is no need to distinguish between
CAD technology and CAM technology as the two technologies have to be
used together to enable dentists and dental laboratories to create high-
precision designs (using a scanner) and dental restorations (using a milling
unit) – be it in a single session at the dentist's premises (chairside CAD/CAM
systems) or through sending the scan to a laboratory (labside CAD/CAM
systems).
5 The Parties are also active in the non-affected neighbouring markets for intraoral sensors and intraoral
sensor holders. In addition, Dentsply is active in Minor Tooth Movement (MTM) systems and dental
implant systems which could be integrated in Sirona's chairside CAD/CAM systems. However, these
markets are not neighbouring markets since they are not complementary (the use of one system does
not essentially imply the use of the other system) nor belonging to a range of products purchased by
customers for the same end use.
4
(14) The Notifying Party further submits that CAD/CAM systems should be regarded
as a single product market as the basic technology and components of a labside
and a chairside system are essentially the same and suppliers of labside systems
could easily supply chairside systems. Labside CAD/CAM systems are used by
dental laboratories, where technicians prepare dental restorations ordered by
a dentist. Chairside CAD/CAM systems allow for the entire process
including production of the dental restoration to be done directly in the
dentist's office – thus eliminating the need for dentists to outsource the
production of restorations to laboratories and allowing the completion of the
procedure in a single session, with obvious benefits for the patients.
IV.2.1.3. Results of the market investigation and Commission's assessment
(15) The market investigation results indicated, contrary to the Parti
